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Proffes, Myra d/b/a M&B Cleaners - Order, February 7, 2001

Order, February 7, 2001

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of the Alleged Violation of Article 19 of the Environmental Conservation Law of the State of New York and Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York by

MYRA PROFFES d/b/a M&B CLEANERS
Respondent.

ORDER

Case No. 2-602115

WHEREAS:

Pursuant to Section 622.15 of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR") Staff of the New York State Department of Environmental Conservation served a Notice of Hearing and Complaint upon the Respondent, MYRA PROFFES d/b/a M&B CLEANERS, by certified mail, return receipt requested.

The Complaint alleges the Respondent, as follows:

Upon information and belief, Respondent Myra Proffes operated a dry-cleaning facility at 171 Merrick Road, Freeport, Nassau County, New York under the name "M&B Cleaners" (hereinafter, the "facility").

Upon information and belief, until August 20, 1999, the facility operated one emission point as that term is defined in Article 19 of the Environmental Conservation Law (ECL) and 6 NYCRR Part 200, specifically one dry-cleaning machine, that emits air contaminants to the environment.

Upon information and belief, on or about January 27, 1999, Staff conducted an inspection of the Respondent's dry cleaning facility and noted that Respondent had failed to upgrade the dry cleaning equipment as required and failed to install a vapor barrier and a general exhaust ventilation system, in contravention of 6 NYCRR 232.6(b)(6)(i)(c).

Upon information and belief, on or about January 27, 1999, the inspection revealed that the Respondent failed to have maintained a weekly leak inspection checklist, violation 6 NYCRR 232.7(a) and (g).

Upon information and belief, on or about January 27, 1999, Respondent failed to obtain a registration or a permit for the facility since November 15, 1997, and continued to operate the facility until August 20, 1999, in violation of 6 NYCRR 232.15(b) and Part 201.

Upon information and belief, on or about January 27, 1999, Respondent failed to retrofit the equipment with a control device for the ventilation system and continue to operate the system since November 15, 1997, violating 6 NYCRR 232.6(b)(6)(ii)(c)(1).

Upon information and belief, on or about January 27, 1999, Respondent failed to maintain emergency preparedness checklists, violating 6 NYCRR 232(7)(a) and (e).

Upon information and belief, on or about July 30, 1999, Staff conducted a second inspection and discovered that Respondent failed to have a department prepared notice posted or displayed in a conspicuous location in the facility, violating 6 NYCRR 232.5(c).

Upon information and belief, on or about July 30, 1999, Respondent failed to maintain an equipment maintenance log, violating 6 NYCRR 232.12(a).

Upon information and belief, on or about July 30, 1999, Respondent failed to maintain operation and maintenance checklists violating 6 NYCRR 232.12(c).

Upon information and belief, on or about July 30, 1999, Respondent failed to maintain a perchloroethylene usage log, violating 6 NYCRR 232.12(b)(1).

The Notice of Hearing and Complaint stated that a pre-hearing conference was scheduled to take place on October 20, 1999 at 11:00 AM at the Region 1 Office of the NYS Department of Environmental Conservation located at Building 40, State University Campus at Stony Brook, New York. The Notice included a statement that, pursuant to 6 NYCRR 622.15, a failure to answer timely or failure to attend a hearing or failure to attend a pre-hearing conference would result in a default under 6 NYCRR 622.15 and a waiver of Respondent's right to a hearing.

On September 14, 1999 Staff sent by certified mail a Notice of Hearing, Pre-Hearing Conference, Calendar Call and Complaint to the Respondent, Myra Proffes, d/b/a M&B Cleaners, 171 Merrick Road, Freeport, New York 11520. The return receipt shows that Respondent received the Notice of Hearing and Complaint on September 19, 1999.

Staff documents by affirmation of Louise M. Aja that:

Respondent failed to appear at the pre-hearing conference;

Respondent failed to serve on the Department an answer within 20 days of its receipt of the Notice of Hearing and Complaint or otherwise timely manner;

the penalty imposed is appropriate based on the violation(s) and the duration of the violation(s); and

failure to answer a complaint or to appear at a pre-hearing conference are both grounds for a default judgment pursuant to 6 NYCRR 622.15.

A copy of the motion and supporting papers were filed with the Office of Hearings and Mediation Services and the matter was assigned to Administrative Law Judge ("ALJ") Francis W. Serbent. An ALJ's obligation in default cases is restricted to finding whether the provisions of 6 NYCRR Part 622.15 were met. The ALJ found these provisions were met. Part 622.15(c) provides further that the ALJ's summary report "will be limited to a description of the circumstances of the default, and the proposed order to the commissioner." Notwithstanding this clear regulatory direction, the ALJ unnecessarily delved into the appropriateness of the penalty sought by Staff.

For the reasons stated below I cannot adopt the ALJ's analysis (attached) of the facts as they pertain to the penalty or the ALJ's reasoning thereon. The Department revised Part 200 and adopted a new Part 232 and concurrently repealed existing Part 232, in early 1997. New Part 232 became effective May 15, 1997. Part 232 applies to all new and existing perchloroethylene ("perc") dry cleaning facilities. See, 6 NYCRR Part 232.1. The purpose of the new Part 232 rule is to better regulate perc, an unsaturated, chlorinated hydrocarbon used by 95 percent of the dry cleaning industry in New York. See, 6 NYCRR 232.2(b)(48). As contained in the Regulatory Impact Statement ("RIS") that is part of the Department's rule making (Official Notice herein taken), perc may be absorbed into the body after ingestion, inhalation, or contact with the skin. Human and animal data reveal perc toxicity in certain body parts. Perc is a suspected carcinogen to humans according to the International Agency for Research on Cancer. The US Environmental Protection Agency classifies perc as a potential carcinogen. Perc emissions are regulated under the National Emissions Standards for Hazardous Air Pollutants (NESHAPS), which the Department implements under 6 NYCRR Part 232. As provided in the RIS in pertinent part:

"The proposed regulations will reduce public exposure to PERC emissions by requiring all dry cleaning facilities, regardless of size, to replace old equipment, upgrade existing machines, control fugitive and vented emissions, create a monitoring and surveillance program, and create a program for ensuring consistent good operation and maintenance practices conducive to maintaining efficient, low polluting operations." See, RIS p. 5.

Further, as noted in the rule making materials, Part 232 was a negotiated rule involving the Department, the NY State Department of Health, the association representing dry cleaners and others. Accordingly, the Department's rule was clearly developed with the meaningful input of the regulated community. Thus the specific rules governing dry cleaning facilities using perc was the result of talks establishing the bounds by which participants in the industry should be regulated to maintain emission and operational health-based controls. It is against this background that all dry cleaner enforcement is to be considered. Staff drafted a penalty assessment dated March 12, 1999 concerning Part 232 violations. That draft penalty guidance provides a reasoned and uniform approach in assessing penalties for Part 232 violations, subject to the facts and mitigation factors that militate against a full penalty assessment.

There can be no dispute that Respondent defaulted and thus waived her right to a hearing and by so defaulting, admits the allegations as charged by Department Staff. The Respondent's dry cleaning business shares a common wall on one side with a restaurant and on the other by a liquor store. Accordingly, Respondent operated its dry cleaning business as a mixed-use facility that is co-located. See, 6 NYCRR 232.2(b)(42).

Despite the above liability, the ALJ has recommended reducing the Staff's requested penalty from $16,250 to $750. The ALJ essentially dismisses many violations under his view that Respondent was not aware of the regulations. Summary Report p.4. This is not a ground to dismiss the violations as a matter of law. Additionally, his treatment of the violations without appropriate penalties ignores the plain reading of the penalty guidance. In this regard, I find much of the ALJ's reasoning and analysis flawed and his conclusions as to penalties are arbitrary and capricious.

I have also reviewed the penalty calculations made by Staff and find their penalty assessments are partly incorrect due to accounting errors. It is well settled that the Commissioner's powers are plenary, and a review of Staff's calculation of its requested $16,500 penalty reveals accounting errors, resulting in assessment of a $12,750 penalty.

There are three components to the penalty calculation. The first component of the penalty calculation involves the procedural violations. These violations include the failure to maintain a weekly leak inspection checklist, failure to maintain an emergency preparedness checklist, failure to record information regarding equipment maintenance and malfunctions, failure to maintain an operation and maintenance checklist, and the failure to maintain a perc purchase and consumption log. The penalty guidance clearly states that these violations are to be treated as a single violation for penalty purposes. Further, violations noted on separate inspection visits are to be considered separate violations. Here, there were two inspections, on January 27, 1999 and on July 30, 1999. During each visit Staff noted procedural violations. The penalty guidance provides for a minimum penalty of $250 per violation. Thus, the penalty for this first component is $500. Staff erred in its penalty calculation by treating these violations as separate violations, in contravention of the penalty guidance. Thus, the penalty sought of $4,000 is in error.

The second component of the penalty calculation involves the failure by the Respondent to install a vapor barrier. The vapor barrier was not installed at the time the business closed in August 1999. Thus, for six months between August 15, 1998 and the first inspection in January 1999, the penalty guidance specifies a penalty of $250 per month. For the seven months between the first inspection and the time the business closed, the guidance specifies a $500 per month penalty. Thus, the penalty for this component is $5,000. Staff erred in its penalty calculation by mis-counting the months of violation. Thus, the penalty sought of $4,750 is in error.

The third component of the penalty calculation involves the failure to upgrade the dry cleaning equipment. The upgrade should have occurred before November 15, 1997 and was never done. The penalty guidance specifies that for the fifteen months before the first inspection a penalty of $250 per month is appropriate and for the seven months after the first inspection and before the business closed, a penalty of $500 per month. Staff erred in its penalty calculation by mis-counting the months of violation. Thus, the penalty sought of $4,750 is in error. The penalty for this component is $7,250.

The correct total penalty calculation is $12,750.

NOW, THEREFORE, having considered this matter, it is ORDERED that:

Pursuant to 6 NYCRR 622.15, Respondent, Myra Proffes d/b/a M&B Cleaners, is in default and the motion for an order without hearing is granted.

Respondent, pay a civil penalty of Twelve Thousand Seven Hundred Fifty ($12,750) dollars in thirty (30) days of the date of this Order.

Respondent permanently cease and desist from any future violations of the ECL and Rules and Regulations promulgated pursuantly thereto.

All communications from the Respondent to the Department concerning this order shall be made to the Department's Region 1 Director, Building 40, SUNY Campus, Stony Brook, NY 11790-2356.

The provisions, terms and conditions of this order shall bind the Respondent, her agents, servants, employees, successors and assigns and all persons, firms and corporations acting for or on behalf of the Respondent.

In the Matter of the Alleged Violations of Article 19 of the New York State Environmental Conservation Law and Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York by

Myra Proffes d/b/a M&B Cleaners
171 Merrick Road
Freeport, NY 11520

Respondent

Summary Report

on

Motion for an Order Without Hearing

and

Motion for a Default Judgment

Case No R1-19990909-53

PROCEEDINGS

Pursuant to Title 6 of the Official Compilation of Codes Rules and Regulations of the State of New York, Section 622.15, the New York State Department of Environmental Conservation ("Department") Staff ("Staff") has moved for a default judgment against Myra Proffes d/b/a M&B Cleaners, 171 Merrick Road, Freeport, NY 11520 (the "Respondent").

Staff made its motions on or about January 21, 2000 by sending to Myra Proffes, the Respondent, the following papers:

A Notice of Motion for an Order Without Hearing and a Notice and Motion for a Default Judgment dated January 21, 2000;

An affirmation in support of Motion for an Order Without Hearing and in Support of Motion for Default Judgment; and

A proposed order in support for a Motion to Default.

Staff then mailed said documents to the Department's Office of Hearings and Mediation Services (the cover letter is on file and stamped as received on January 24, 2000) and again by certified mail on March 17, 2000.

Respondent's response to Staff's Motion for an ORDER WITHOUT HEARING was due on February 14, 2000 pursuant to 6 NYCRR Section 622.6, presuming Respondent is entitled to an additional 5 days when service is made by ordinary mail and excluding Saturdays, Sundays and any public holiday.

No response to the motions has been received from the Respondent as of the date of this Summary Report.

Procedures for an Order Without Hearing

Section 622.12, "Motion for order without hearing" provides, among other things:

"(a) In lieu of or in addition to a notice of hearing and complaint, the department staff may serve, in the same manner, a motion for order without hearing together with supporting affidavits reciting all the material facts and other available documentary evidence. ...

"(b) The motion shall include a statement that a response must be filed with the Chief ALJ within 20 days after receipt of the motion and that the failure to answer constitutes a default.

Default procedures

Section 622.15, "Default procedures" provides in pertinent part:

"(b) The motion for a default judgment may be made orally on the record or in writing and must contain:

"(1) Proof of service upon the respondent of the notice of hearing and complaint or such other document which commenced the proceeding;

"(2) Proof of the respondent's failure to appear or failure to file a timely answer; and

"(3) A proposed order.

"(c) Upon a finding by the ALJ that the requirements of subdivision (b) have been adequately met, the ALJ will submit a summary report, which will be limited to a description of the circumstances of the default, and the proposed order to the commissioner. ..."

The following Findings are based upon the papers submitted, as identified above.

FINDINGS

The receipt for the aforesaid mailing, Article # P 397 086 339, was returned to Staff, indicating the mail was received September 19, 1999 and apparently signed by Myra Proffes.

As of January 21, 2000 (the date of the motion papers), Myra Proffes d/b/a M&B Cleaners had not responded to the Notice of Hearing, pre-hearing conference, calendar call and Complaint.

The requirements for a default judgement have been adequately met as prescribed by 6 NYCRR Section 622.15(b).

Penalty Discussion

Dollar amount of the penalty

In its MEMORANDUM OF LAW IN SUPPORT OF MOTION, Staff advises that, among other things:

"The dry-cleaning regulations were substantially revised in 1997 with an effective date of May 1977. Most dry-cleaning businesses, known to the State of New York to be in existence at that time, were made aware of the new regulations through mailings by the DEC."

Staff recognized the need of a special mailing to make the dry cleaners aware of the substantial revisions to the regulations. Apparently the Respondent, Myra Proffes, was not made aware of the new regulations through the special mailings by the DEC and Staff did not offer a mailing list to show that it mailed to the Respondent or even claim the Respondent was so notified. Most dry-cleaning businesses may have been notified but we have no record here that the Respondent was notified. That is not fair to the Respondent especially since Staff's first contact with Myra Proffes, according to the papers Staff filed in support of its motions, came on January 27, 1999 when Staff inspected the premises.

Moreover, the Respondent acted quickly once notified by Staff of the revised regulations. During Staff's inspection on January 27, 1999, Staff found three requirements that had to be met and cited them in its written NOTICE OF COMPLIANCE DETERMINATION as filed as part of its motion papers. She complied with one requirement immediately by relocating an exhaust vent. Staff recognizes this work and did not seek a penalty although it could by law, apparently in keeping with Staff's calculation of the lowest possible penalty assessment that would be extremely fair and reasonable. It should be noted that the regulation allows six months for this work.

Respondent also attempted to timely comply with the second requirement by constructing vapor barriers after the January inspection by May 13, 1999 and so certified that it did only to find that it failed the next inspection. The regulations initially allowed 15 months for this work and she did it in less that four months. Since most dry cleaners were noticed of the revised regulations by the Staff's special mailing, a comparable notice to the Respondent would be the date when she was notified of the new requirements by Staff during the inspection of January 27, 1999 and accordingly, to be fair, a comparable 15 months from this date comparable to that given the dry cleaners on Staff's mailing list, should be given to the Respondent. This 15 month period would have ended after the Respondent went out of business.

The third requirement was for the installation of interim control equipment or in the alternative, immediate replacement of the existing machine with a fourth generation dry cleaning machine that is required before 2005. The Respondent evidently investigated equipment cost to arrive at the conclusion as stated in her going out of business notice to the Staff that: "I cannot afford the prices they are asking to change over my machine." Respondent shut down her dry cleaning machine on August 4, 1999, seven months after Staffs' initial inspection. The regulations initially allowed 6 months for the equipment installation.

The Respondent certainly did what she could to meet the requirements, even an ill advised twenty dollar offer to the inspector. Nonetheless, she immediately initiated attempts to comply with the requirements. She timely met one requirement and was underway, and still within the 15 month envelope of time since January 27, 1999, towards satisfying the second requirement before going out of business. The enforcement guidance document states, in part: "Part 232 requires dry cleaners to take various measures in an attempt to reduce impacts ..." (Emphasis added) The papers Staff presented in support of their Motions document how quickly the Respondent did comply and attempted to reduce impacts and support the calculation of the lowest possible penalty.

A penalty calculated on fairness as described above is $750.00. The following breakdown, based on Staff's item numbers in its motion papers, for the recommended penalty amount is:

Item VIII, 6 NYCRR Sections 232.15(b) & 201 re operation permit (Note: The procedural violations Items II through VIII are "bundled" as indicated they should be as provided in the Enforcement Guidance dated March 12, 1999. Certain allegations would not stand analysis but since they are bundled, the dollar amount would not change.) $250.00

Item III (equipment conversion) arguably 2 months @ $250 each $500.00

TOTAL $750.00

The Staff's first notice of certain other procedural requirements was a consequence of an inspection on July 30, 1999. Staff's written Notice of Compliance Determination following this inspection was served August 11, 1999, a week after Myra Proffes went out of business.

As to the Level of Deterrence

The Respondent attempted to comply and indeed did comply with the equipment venting requirements but the total overall cost of compliance alone was sufficient to discourage the continuing of the Respondent's dry cleaning operation.

CONCLUSION

The motion for an order without hearing and the motion for a default judgement are granted. This Summary Report, Staff's proposed Order (attached hereto) and the recommended order are referred to the Commissioner for final determination.